How can family restaurant chains fight inflation against giants like McDonald's using Crypto Assets?

Author: Juan Galt

Compiled by: Shenchao TechFlow

Tahini's, a Canadian fast food chain, boldly embraced Bitcoin in 2020 to combat inflation and compete with industry giants like McDonald's. Below is their Bitcoin financial strategy.

Tashini Restaurant is a Canadian fast-food chain focusing on Mediterranean and Middle Eastern cuisine. Since integrating Bitcoin into its business in 2020, it has continuously optimized its strategy. Today, Bitcoin accounts for over 70% of its reserves, and this decision has played a key role in its expansion to 62 restaurants in just over a decade.

"We are continuously putting more funds into Bitcoin," said Omar Hamam, the CEO and co-founder of Tahini, in an interview with Bitcoin Magazine. Omar and his brother Aly Hamam opened their first restaurant in London, Ontario in 2012. Since then, Tahini has grown to 62 restaurants nationwide. In 2020, they were inspired by Michael Saylor to adopt an early Bitcoin financial strategy. This bold move provided them with a reserve of funds that enabled them to compete with fast food industry giants.

"We are competing with McDonald's and Chipotle," Omar said, "The funds that these companies have are more than a hundred times that of Tahini. So, having such an advantage—a financial strategy that makes our financial situation more robust and allows us to maintain wealth across time and space—is the best decision we've made for the business."

During the development process, the company implemented multiple innovative strategies, including deploying Bitcoin ATMs in many franchise stores, as well as a brand new media strategy. According to Alibaba, this media strategy has brought them three billion views across all social media platforms in the past five years, including a YouTube channel with over 3.2 million subscribers. Of course, their Bitcoin financial strategy is also one of the highlights.

Alibaba's Obsession with Bitcoin: From the Devaluation of Egyptian Currency to Insights After the Pandemic

Tahini's Bitcoin strategy is primarily driven by Ali Hamam. His inspiration comes from the profound impact his family has suffered over the past 20 years due to the significant devaluation of the Egyptian pound. Ongoing hyperinflation has taken a heavy toll on his family, and this experience led him to discover the potential of Bitcoin during the market crash in March 2020.

"I come from Egypt, and over the past twenty years, I have witnessed the Egyptian pound depreciate by about 85%. I have seen my family struggle, and my parents are struggling as well. Their savings have nearly been wiped out over these years in Egypt. Sometimes, in Egypt, such a situation can happen like a lightning crash. The government might devalue the currency by 50% within a month," Ali recalled.

In March 2020, as the pandemic triggered market panic, the price of Bitcoin plummeted from a high of $10,000 to $4,000. "I bought a little at that time, purely because it had dropped so much, I thought, why not buy some and give it a try. ... But as I delved deeper into my research, I completely fell down the Bitcoin 'rabbit hole'. In the following months, I kept buying more Bitcoin. In the first three months of encountering Bitcoin, it almost took over every corner of your life - listening to podcasts, reading books, constantly buying more," Ali explained.

After the market crash, Bitcoin rebounded to around $10,000 and consolidated near this price for several months. Meanwhile, governments around the world injected trillions of dollars into their economies to combat the pandemic. The U.S. lowered interest rates to zero, and Canada also began providing pandemic relief payments to eligible residents. Omar recalled, "The government was practically printing money nonstop. And it wasn't just the Canadian government; almost all governments were doing this. So, we knew that inflation was about to become a problem." At the same time, Bitcoin's block reward halving occurred during that period, which contributed to one of the most spectacular bull markets in Bitcoin's history.

This is the era when Michael Saylor entered the Bitcoin industry and became one of its most famous supporters. However, Saylor's talks and documents on how to build a corporate Bitcoin strategy and how to persuade boards or other business partners have only just begun to gain popularity in podcasts, while Bitcoin financial strategies are still in their infancy.

After Ali fully "invested" in Bitcoin, he began promoting it to his family. "I started promoting Bitcoin to my business partners, brothers, and cousins, and they began to purchase it personally." Ali explained that purchasing Bitcoin personally is simple, but using the company's reserves is much more difficult. "It's not a quick process. I wanted us to invest the company's funds into Bitcoin, but they hesitated. 'That's a crazy idea.' 'This way or that way,' we kept discussing back and forth until Michael Saylor announced the first purchase. I had already prepared all the accounts and groundwork. So, when Saylor bought the first batch of Bitcoin, it pushed us. A week later, we invested all the company's funds into Bitcoin."

Buying price, regular investment strategy, and perseverance in a bear market

Tahini's Bitcoin investment strategy differs from that of publicly listed companies today, which issue stocks (and other financial instruments) to purchase Bitcoin and increase reserves. As a private company that began accumulating Bitcoin before an ETF was approved in the U.S., Tahini has taken a simpler approach: buying Bitcoin as reasonably as possible every month, without ever stopping. According to Omar, Bitcoin now accounts for over 70% of the company's reserves.

Their timing was excellent, starting to buy when the price of Bitcoin was around $10,000. However, the so-called "Dollar-Cost Averaging (DCA)" strategy works well at any price, even during bear markets.

For example, if you invested $1,000 every two weeks to buy Bitcoin during the peak of the bull market in 2021—when the price was close to $70,000—each time you bought at a lower price, you would be lowering your average purchase price. The result is that when the bear market ends—say, when the price exceeds $30,000—you would break even and be prepared for the upcoming bull market. The only requirement is to have a long-term investment mindset.

"Buy every month, buy every month. The ups and downs don't matter. I know this sounds too simple, but in reality, it's the only way to do it. Right? You just need to buy and not try to outsmart the system unless you're really good at it. Set aside a portion of funds every month, and it will work. If you look back over the last four years, you'll find that your investment has multiplied by 2 to 30 times." Omar explained. He added, "I've had this conversation with a lot of people. Friends, family, everyone. I always tell them, listen, start from somewhere. Don't invest too much and see how it goes. For example, if you invest $1000, watch how it changes. If next year that $1000 becomes $1200 or $1500. Imagine what would happen if you had $100,000 or $1,000,000?"

Although there is no strict regulation on the best frequency for a regular investment strategy in Bitcoin, whether for individuals or businesses, Tahini chose to purchase monthly as it aligns with their accounting processes. "Every month we have a profit and loss statement. Every month we see our profits and losses. At the end of the month, we decide, okay, we want to set aside this much," Omar explained.

As for the investment amount, Omar explained that they do not invest a fixed or percentage-based amount. "It also depends on whether we are investing in the business this month? How are our expenses? Are there any large payments? Sometimes there are a lot of expenses at the end of the year. So you have monthly highs and lows, etc., but the key is to keep investing funds. How much to invest each month is something you need to decide."

Bitcoin, to sell or to collateralize? Tahini's financial strategy and payment challenges

In terms of how to realize the monetization of Bitcoin, Tahini chose a simple strategy. When the timing is right and business needs are urgent, they sell a portion of their Bitcoin and then buy it back later according to a standard dollar-cost averaging (DCA) investment strategy, integrating capital gains tax into the accounting process. Omar explained, "When you need to reinvest, you always need funds. For example, if you want to conduct a large marketing campaign as a chain store, right? You need to tap into those reserves. With funds, you have power. The more funds you have, the more freely you can make the right decisions for the company, rather than just doing what you can afford."

The challenge of accepting Bitcoin payments and integrating POS systems.

As the first step towards Bitcoin integration, Tahini explored the possibility of accepting Bitcoin as payment in their restaurant. However, a series of challenges forced them to turn away. Many of these challenges still exist in businesses around the globe, involving the closed-source and walled garden model of popular payment processing systems.

Omar explained: "Many of these point-of-sale system companies handle payment processing themselves, and their systems lack the capability to accept Bitcoin." Most of these systems are closed-source, with strict API limitations, making it difficult to integrate Bitcoin into the economy. This has been a barrier to the adoption of Bitcoin payments since the inception of Bitcoin.

However, the friction faced by merchants is not just the barrier of the POS system; the list of functionalities required for merchants to stay competitive is very complex, and most Bitcoin payment systems still lag behind.

"The POS system is not just about payments. It also involves how to build menus in the background. The POS system provides reports, analyzes what you sold, when you sold it, the store's operational status, which times are busy, which times are not, and how to request what you ordered. It's quite complex, right? So payment is just the last piece of the puzzle. Therefore, when we choose a POS system, it's not just about the payment system, but also about their functionalities and the strengths and weaknesses of the system."

In addition, the integrated Bitcoin POS system needs to support fiat currency in order to be feasible among today's ordinary merchants, which further raises the barriers to entry and competition.

Therefore, Tahini chose the next best option: they partnered with the Canadian Bitcoin ATM company Bitcoin Well to install Bitcoin ATMs in 10 restaurants, opting to receive all profits from the machines in Bitcoin and distribute them into separate accounts for each restaurant. Although Ali reported that these ATMs only generated about CAD 250 in revenue per month, since 2021, these "sats flows" (as some in the industry refer to them) have accumulated, and with the rise in Bitcoin prices, each restaurant now has over CAD 40,000 in Bitcoin balance, which is quite significant.

Nevertheless, Omar is optimistic about overcoming these obstacles, as interest in Bitcoin payments is stronger than ever. "I believe Bitcoin is growing rapidly, many companies are adopting it, people are becoming more knowledgeable about Bitcoin, and their awareness of it is increasing. So, I think it's just a matter of time."